Let’s start this piece off with some facts about Performance Marketing, taken from the recent IAB/PWC Online Performance Marketing (OPM) study:
- Advertisers in the UK spent £1.5 billion on affiliate marketing in 2016, up 12% YoY – 88% on affiliate and 22% on lead generation
- This spend generated £19.4 billion of actual sales – £17.6 billion via affiliate £1.8 billion via lead generation
- For every £1 spent by advertisers, they made £12.30 back in sales, up from £11.80 in 2015
Those are some impressive numbers in anybody’s book, and with that kind of ROI surely executives are busy talking about their companies affiliate strategies in board meetings and it’s up there with display and programmatic in terms of priority.
Well, that’s what we’d like to happen but sadly when it comes to the c-suite at advertisers, affiliate marketing is still not given the time that perhaps it should. Why is this? It’s not like affiliate is new and unproven in terms of value, it’s a veteran digital channel and the above stats clearly outline its value and continuing growth. It effectively and efficiently drives sales for advertisers and it’s not stagnant when it comes to evolving and testing new ideas and technology.
Even with the above knowledge, the question still stands.
Below I have listed three things that I believe are barriers to our entry into the boardroom. N.B the first one is based on conversations I have had over the years with people working in various marketing roles at advertisers.
- A legacy reputation of being a small channel that some (wrongly) believe cannibalises sales from other channels
- A lack of education and awareness outside of the affiliate industry on how the channel has changed and the value it brings
- A symptom of point B – as an industry* we don’t shout externally or take our opportunities to extol the virtues of affiliate when the opportunity arises
*Clarification: There are many people in the industry who do shout about what we do, they know who they are, but they need support and help from all of us.
So how do we turn this funk around and get affiliate talked about in the boardroom?
The value of affiliate
Firstly, we need to get back to basics and use the data we have available to us. Let’s make sure that we are showing advertisers the value the channel is bringing. We need to work with them to really understand where affiliate sits within their marketing channels and demonstrate it doesn’t cannibalise sales; show senior marketers what affiliate brings to the table.
This could be done via demonstrating and testing the strategic use of incentive sites to scale and drive ROI or it could be about the triple threat provided by working with affiliate content sites that deliver sales, brand awareness, and brand trust.
Work with advertisers as if you are the in-house team and help your internal contacts push the affiliate agenda within their organisation, develop long-term strategies and work to develop those senior contacts.
Easier said than done, you may say; we’ve tried this before, I hear you cry. Well, carry on regardless, perhaps take a step back. Are you taking the right approach? Are you talking about the right things?
Take our chances when they come
The recent scandal surrounding programmatic advertising and adverts appearing where they shouldn’t be is a prime example of a real chance to shout from the rooftops about the safety and transparency of affiliate marketing, yet there really wasn’t any of that.
We know where our ads go, we know who our advertisers are working with, we have stringent protocols in place to spot dodgy affiliates, we regularly audit our programmes to make sure there are no infringements. We rely on people, not machines.
Set out our strategy
It’s all well and good saying we want our industry to get the recognition we feel it deserves higher up the chain of command at advertisers, but how do we do it? What’s our strategy, do we really understand how the affiliate channel is perceived in the wider marketing world? Do we know exactly what we want to achieve by getting the higher ups to take more notice of us? (apart from increased budgets) And most importantly – how do we get there? It’s not this article’s job to provide answers but to get us all thinking about our individual and industry strategies can tackle this question.
So, to recap, the whole idea of this article was to look at how to establish an affiliate dialogue in the boardroom. To do this, we’ve looked at the performance of the affiliate channel, the potential reasons why the channel isn’t discussed and finally at three potential areas where we can make a difference.
Hopefully, this has provided a bit of a spark for you to think about your own solutions to this, most vexing of problems. Perhaps you agree with what’s written, perhaps not. Either way, this is an issue that is not going to go away and it’s time we did something about it.